Return on Investment. That's a big marketing buzz phrase. How do you measure your ROI. The fact is, most clients don't know how to measure their ROI. Some sales reps fear that you will ask them how to measure your ROI. As an advertising agency, our job is to educate our clients on what to expect in terms of ROI. It's not as simple as increased dollars in the cash register or increased revenue.
Let me give you an example from the Spring of 2007; we have a client who wanted to do a direct mail invitation event. Typical direct mail response or redemption is usually 1 to 3 percent return. One key feature that we felt would increase the response rate was that the card had a lucky number on it which was individually printed on each postcard. They were encouraged to come into the store to match their lucky number with a prize. (Not rocket science, but an extra step that sometimes may be overlooked.) The post card advertised prizes in varying values, from $5K to $10. We feel that this increases the likelihood that the potential customers would get out of their home to come to an event where they knew they would be in the position to be "sold to". We mailed out 5,000 of these cards to the clients mailing list of past customers as well as a mailing list supplied by a lifestyle magazine targeting the same potential customers. We made sure that any duplication of names was eliminated so that the list went to 5,000 unique addresses.
The day of the event dawned with the decision maker we deal with not being at the store, having handed off the running of the event to a manager. Details of the prize redemption were fuzzy to the employees of the store not having been clearly communicated by the decision maker directly. When we followed up with the client to assess the success of the event, he told us that he was disappointed that he had had no sales during the event. We asked him how many people came in from the mailing to match their number for a prize. He told us that they had 50 people come in with their cards during the event. (1%) and that they had good traffic in the store but no one was buying. We reminded him that that was within the range of expected success of the campaign. Also that those 50 people who brought their cards in were likely very interested in his product/service and his sales people may have had a hard time closing as opposed to selling. There is a difference you know between in store foot traffic and sales. This difference is likely due to a hiccup in the sales process. We followed the guideline of inviting the potential customer whose lifestyle was a match, past customers in particular, and got them into the store. The sales process from there it is out of our hands. The client did note to us that his sales staff had been grumbling in the week prior that "nobody is buying now". We believe, and the client agreed, that his sales people in this particular case had psyched themselves out of the sale.
He decided to perform an intense sales training with his staff and the weeks following their closings began to greatly increase. During this time following the direct mail promotion we continued with the typical monthly broadcast television and radio campaign. So what is the difference in sales....the sales people were now motivated to close the sale. The client also agreed that he should have not abandoned the ship during the event as key elements in the promotion and sales process were not completely understood by his staff, which also may have decreased the success of the event. It should be additionally noted that residual top of mind awareness does carry over from event advertising into following weeks and or months often difficult to pin point to ROI on the original event.
A recent Ad Age video notes that we should perhaps re-think ROI in terms of Relevance, Originality and Impact...these ads can be 10 times more effective if they're done right. Original, not weird of offensive. Relevant to the audience being targeted. Something to think about....
Gena Zerbin